Memorandum on Petroleum Reserves

Memorandum for Chairman Doughton Representative Vinson

I am sending you herewith for your information a copy of estimate of Petroleum Reserves in the United States which has just been prepared by the Petroleum Conservation Division of the Department of the Interior. This report was prepared for the Conference of Governors of oil-producing States, held at Hot Springs, Arkansas, January 24, 1938.

I am also enclosing copy of report on this Oil Conservation Conference made by Mr. E. B. Swanson, the Associate Director of the Petroleum Conservation Division of the Department of the Interior.

This is sent to your Committee because there has been raised the question of placing a small tax on crude petroleum, not only for the purpose of producing revenue but also for the purpose of conserving our oil resources, both for the use of industry and for national defense.

The report in regard to reserves is somewhat more alarming than I had previously believed. For instance, present drilled reserves are estimated to be capable of supplying demand only until November, 1941, and to meet expected demand during twenty years to come it would be necessary, in addition to production from known reserves, to discover twenty-eight billion barrels of new oil. Such new discoveries would have to be made at a rate of discovery greatly exceeding discoveries made during the past seven years.